The potential expansion of tariffs follows Proclamation 11002, signed on January 14, which imposed a 25% duty on a narrow set of advanced accelerators, such as Nvidia’s H200 and AMD’s MI325X. That action was explicitly labeled Phase 1, with a directive for the Commerce Department to report by July 1 on semiconductors used in U.S. data centers.
Now, according to POLITICO’s report, the administration is considering a second phase that would cover a broader range of electronic products. Commerce Secretary Howard Lutnick is said to favor a tiered system where companies can import chips duty-free only up to a volume that matches their U.S. production commitments. This would effectively penalize firms that manufacture most of their chips overseas, primarily in Taiwan and South Korea.
The January exemptions, which covered data centers, research and development, startups, and consumer devices, are now at risk. Commerce officials have indicated in private talks that those exemptions may not be renewed, according to sources. A phase-in period is under discussion, and the framework could change substantially in the coming weeks.
Critics argue that such tariffs could raise prices for consumers and disrupt supply chains for electronics, including laptops, gaming consoles, and servers. Supporters contend they are necessary to encourage domestic chip manufacturing and reduce reliance on foreign suppliers, particularly Taiwan. The debate comes amid ongoing trade tensions with China, which has been building its own chip supply chain and imposing export controls on rare earths.
The administration has also been in tariff negotiations with Taiwan, South Korea, and Japan, as reported by the USTR and Commerce in April. The outcome of these talks could influence the final structure of any new tariffs.